The Clinton Herald, Clinton, Iowa

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Clinton

July 18, 2012

Lawsuit filed against Ashford parent Bridgepoint

CLINTON — A Pennsylvania-based law firm has filed a federal class-action lawsuit against Bridgepoint Education, the parent company of Ashford University, in light of the for-profit university’s recent accreditation struggles. 

The suit was filed in the U.S. District Court for the Southern District of California on behalf of purchasers of Bridgepoint Education stock during the period of May 3, 2011 and July 6, 2012.

The suit, filed by Ryan & Maniskas, LLP, alleges Bridgepoint and certain officers and directors violated the Securities Exchange Act of 1934. 

The complaint alleges that during the 14-month period, the defendants issued “materially false and misleading statements regarding the company’s business and prospects.” The lawsuit specifically mentions alleged concealment of Ashford’s accreditation issues, which ultimately caused stocks to plummet by 34 percent from July 5 when the company revealed it was denied accreditation, to July 9.

Ashford currently is accredited by the Higher Learning Commission, the accrediting body for 19 states, including Iowa.

Ashford was seeking accreditation from the Western Association of Schools and Colleges because the primary focus of its activities have shifted from Iowa to California since it was accredited by the HLC in 2006.

According to the WASC, it denied Ashford accreditation because of low student retention rates and lack of a system to monitor and assure student success, among other things.

According to a press release issued by the law firm, in May and June 2011, the WASC and its eligibility review committee notified Ashford of several concerns it had regarding the institution’s future accreditation.

The suit claims Bridgepoint officials failed to disclose to stockholders that it “had failed to implement plans, procedures and practices to sufficiently assist students in staying with the programs they enrolled in and complete the courses,” and failed to provide adequate educational resources.

The lawsuit also claims Ashford failed to maintain a “sufficient core of faculty and programs,” which led to poor teaching and student completion rates.

In addition, the lawsuit states Ashford had inadequate review procedures and failed to maintain an empowered and independent governing board. The lawsuit follows the HLC placing Ashford on “special monitoring status.”

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